June 6, 2005 8:55 AM PDT

Intel, Red Hat, SAP invest in Black Duck

Intel, Red Hat and SAP have joined several venture capital firms to give Black Duck Software $12 million in a second round of funding, the start-up said Monday.

Black Duck sells software that lets customers make sure open-source and proprietary software don't inappropriately intermingle. The task is increasingly relevant with threats of lawsuits such as the SCO Group's against IBM and with one company needing to scrutinize the software of another it's considering acquiring.

Fidelity Ventures led the investment round in the Waltham, Mass.-based start-up. Intel and SAP likely are hoping for a repeat of their favorable experience in the 1990s of investing in Red Hat, a seller of Linux whose stock soared.

Two earlier investors, Flagship Ventures and General Catalyst Partners, also participated in the second round. Red Hat also was an earlier investor, the company said.

Intel directly and indirectly supports Linux, the best-known open-source project. And it has a vested interest in the success of open-source software: The company argues that most is developed on Intel systems.

SAP, which sells proprietary software but was an early Linux backer, said customers need to be able to minimize risks when using a mixture of open-source and proprietary software.

Black Duck isn't alone, though. Palamida offers similar technology and last week announced that Cisco Systems has become a customer, incorporating it into its development process.

 

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